The regulatory system should ensure that new regulation and the existing 'stock' are appropriate, effective and efficient. This requires the robust vetting of proposed regulation; 'fine tuning' of existing regulations and selecting key areas for reform.

It also requires that these be performed in a coordinated and cost-effective way, with political leadership a key factor in all this.

There is a range of approaches to reviewing existing regulation and identifying necessary reforms. Some are more 'routine', making incremental improvements through ongoing management of the stock; some involve reviews that are programmed, and some are more ad-hoc.

Designed for different purposes, the techniques within these three categories can complement each other, though their usefulness varies.

Among 'management' approaches, red tape targets can be a good way to commence a burden reduction program. But one-in, one-out' rules have more disadvantages than advantages. Regulator practices can play a key role in compliance burdens, with scope apparent for improvement.

Reviews embedded in legislation can usefully target areas of uncertainty. Sunsetting can help eliminate redundant regulation and ensure that re-made regulation is 'fit for purpose', but requires good preparation. Post implementation reviews, triggered by the avoidance of a regulation impact statement, are an important failsafe mechanism but need strengthening.

Public stocktakes cast a wide net and can identify cross-jurisdictional and cumulative burdens. Reviews based on a screening principle, particularly the competition test, have been highly effective and could be extended. In-depth reviews are best for identifying options for reform in more complex areas, while benchmarking can point to leading practices.

Good design features vary for the individual techniques, but all require sound governance and effective consultation. For significant reviews, public exposure of preliminary findings is a key success factor.

While Australia's regulatory system now has the necessary institutions and processes broadly in place, there remains scope for improvement in:

prioritisation and sequencing of reviews and reforms - with greater attention paid to the costs of developing and undertaking reforms

monitoring of reviews and the implementation of reforms

advance information to achieve better focused consultations

incentives and mechanisms for good practice by regulators - with a further review needed to identify the best approaches

building public sector skills in evaluation and review.

Background information

Anthony Housego (Inquiry Research Manager) 02 6240 3217

The Australian Government now has institutions and arrangements in place to identify areas of regulation that are unduly burdensome or ineffective and to develop appropriate reforms. However, in a report released today - Identifying and Evaluating Regulation Reform - the Productivity Commission said there was a need to improve how these operated in practice.

The Commission was asked by the Australian Government to assess current 'frameworks and approaches' for identifying areas for further regulation reform and methods forevaluating reform outcomes.

Productivity Commission Chairman, Gary Banks, said: 'Even regulations that have been rigorously vetted have a use-by date - and many regulatory proposals are not rigorously vetted. Ensuring that we can identify which regulations need removal or revision is important if policy objectives are to be met without imposing unnecessary costs or having unintended impacts.'

The Commission found that a range of approaches is required to ensure that the stock of regulation is fit for purpose and to deliver net benefits to the community. They range from 'good housekeeping' measures to in-depth reviews. For most of these, good governance and consultation are crucial to their cost-effectiveness.

Areas for wider systemic improvement include prioritising and sequencing reviews and reforms; providing more information on progress in implementing recommendations; the provision of advance information to achieve better focused consultations; incentives and mechanisms for good practice by regulators; and building up skills within government in evaluation and review.

Background information

Anthony Housego (Inquiry Research Manager) 02 6240 3217

Leonora Nicol (Media and Publications) 02 6240 3239 / 0417 665 443

Preliminaries

Cover, Copyright, Foreword, Terms of reference and Contents.

Overview - including key points

Summary of Recommendations

Chapter 1 What this study is about

1.1 The scope of this study

1.2 Regulation reform in Australia

1.3 How the Commission has approached this study

1.4 The structure of this report

Chapter 2 Why reform the 'stock' of regulation?

2.1 The importance of 'good' regulation

2.2 Managing the stock of regulation

2.3 Marshalling reform efforts

Chapter 3 Approaches to reviewing and reforming the stock of regulation

3.1 Three broad approaches

3.2 Management approaches

3.3 Programmed reviews

3.4 Ad hoc reviews

Chapter 4 Lessons from past reviews of regulation

4.1 Different approaches target different burdens

4.2 Stock management approaches

4.3 Programmed review mechanisms

4.4 Ad hoc reviews

4.5 How cost-effective are the approaches?

Chapter 5 Evaluation methods

5.1 The role of evaluation

5.2 Ex post evaluation methods

5.3 Methods for quantifying the impacts of reform

Chapter 6 Strengthening the framework for regulation reform

6.1 The regulatory system

6.2 Can the operation of Australia's regulatory system be enhanced?

Appendix A Submissions and Consultations

References

Please note: The following appendices are only available online and are not included in the printed report.

Appendix B Public stocktake reviews

Appendix C In-depth reviews

Appendix D Principles-based reviews

Appendix E Programmed reviews

Appendix F Benchmarking

Appendix G Stock management tools

Appendix H Regulator performance

Appendix I Ex post evaluation frameworks

Appendix J Quantifying the impacts of regulation and reform

Appendix K How do different countries manage regulation?

Printed copies

Printed copies of the full report can be purchased from Canprint Communications.